UK denies that internal market plan will lead to race to the bottom

The UK government has denied that plans for a new internal market would lead to a race to the bottom in regulatory standards as the Scottish National party said the proposals “ride roughshod” over devolved powers.

Alok Sharma, business secretary, told the House of Commons that a white paper on the post-Brexit internal market published on Thursday would give business the “regulatory clarity and certainty” that companies needed. “It will ensure that the cost of doing business in the UK will remain as low as possible,” he said. “This is not about ideology, this is about pragmatism.”

But Nicola Sturgeon, Scotland’s first minister, said the UK government was seeking to “ride roughshod over the powers of the Scottish parliament”.

Mr Sharma insisted the paper, which sets out the internal market’s framework, would respect the devolution settlements across the country.

He emphasised that responsibility for more than 70 policy areas would transfer from Brussels to Edinburgh, Cardiff and Belfast — covering issues including air quality, animal welfare, hazardous substances and water quality.

Yet the plans are controversial because primary legislation passed in Westminster will impose a single internal market across the country with “mutual recognition” of products in all parts of the UK.

Mr Sharma said that would help companies by avoiding the damage of a “fractured economy”.

But Ian Blackford, the SNP leader in Westminster, said the Holyrood parliament already had many of the “new powers” promised by London — such as on energy efficiency and animal welfare.

Under the plan, the administrations in Edinburgh, Cardiff and Belfast will be able to set some regulatory standards for producers based in their countries — including food manufacturers — from January.

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The SNP fears the British government will strike a trade deal with the US allowing the import of food products such as chlorinated chicken © Holger Burmeister/Alamy

But through mutual recognition the administrations would have to accept products such as food from elsewhere in the UK, even if they were made to lower standards.

The SNP fears the British government will strike a post-Brexit trade deal with Washington allowing contentious US food products, such as chlorinated chicken, into the UK.

“This will mean a reduction in standards in one part of the UK driving down standards elsewhere,” Mr Blackford told MPs.

Kenny MacAskill, an SNP MP, described the plans as a “Trojan Horse for Trump’s America”, declaring: “Beware not this time of Greeks, but Britons bearing gifts.”

But Mr Sharma insisted that fears about chlorinated chicken and other food produced to lower standards entering the UK were unfounded: “We have been very clear we’re not signing up to trade deals that would compromise our high environmental and animal welfare standards.”

The Labour-run Welsh government in Cardiff Bay is also alarmed by the proposals. The Financial Times has seen a recent letter from Jeremy Miles, Wales’ minister for European transition, claiming the “headlong dash” for primary legislation to put in place a general principle of mutual recognition was an “attack on devolved legislative competence”.

Ed Miliband, Labour’s business spokesman, said his party supported maintaining a UK internal market. But he told the Commons: “The risk is that one legislature would be able to lower food, animal welfare standards and other nations would not have recourse to not accept food and other goods produced on that basis.”

The white paper promises an independent body to monitor the internal market and listen to the concerns of consumers and business. This would either be a group with links to parliament, an expert committee, or a body accountable directly to parliament.

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The paper also confirms that the UK government wants to ensure state aid is a “reserved matter” — to be controlled by London — which will anger the devolved administrations.

But it says the devolved administrations will remain responsible for how much to distribute to which industries in subsidies.



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